Tiếng Việt- 1 Circular No. 210/2012/TT-BTC of November 30, 2012, guidance on the establishment and operation of securities company
- 2 Circular No. 07/2016/TT-BTC dated 18th January 2016, on amendments and supplements to certain articles of the Circular No. 210/2012/TT-BTC dated 30th November 2012 on guidelines for the establishment and operation of securities companies
- 1 Ordinance No. 01/2012/UBTVQH13 of March 22, 2012, on the consolidation of legal document
- 2 Constitution dated November 28, 2013 of the socialist republic of Vietnam
- 3 Circular No. 210/2012/TT-BTC of November 30, 2012, guidance on the establishment and operation of securities company
- 4 Circular No. 07/2016/TT-BTC dated 18th January 2016, on amendments and supplements to certain articles of the Circular No. 210/2012/TT-BTC dated 30th November 2012 on guidelines for the establishment and operation of securities companies
| MINISTRY OF FINANCE | SOCIALIST REPUBLIC OF VIETNAM |
| No.: 07/VBHN-BTC | Hanoi, April 05, 2016 |
GUIDANCE ON ESTABLISHMENT AND OPERATION OF SECURITIES COMPANIES
The Circular No. 210/2012/TT-BTC dated November 30, 2012 by Minister of Finance providing guidance on establishment and operation of securities companies and coming into force as of January 15, 2013, was amended by:
The Circular No. 07/2016/TT-BTC dated January 18, 2016 by Minister of Finance on amendments to the Circular No. 210/2012/TT-BTC dated November 30, 2012 providing guidance on establishment and operation of securities companies, and coming into as of March 15, 2016.
Pursuant to the Law on Securities dated June 29, 2006;
Pursuant to the Law dated November 24, 2010 on amendments to the Law on Securities;
Pursuant to the Law on Enterprises dated November 29, 2005;
Pursuant to the Government's Decree No. 58/2012/ND-CP dated July 20, 2012 elaborating and guiding the implementation of the Law on Securities and the Law on amendments to the Law on Securities;
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At the request of Chairman of the State Securities Commission of Vietnam;
Minister of Finance promulgates a Circular providing guidance on the establishment and operation of securities companies 2
Article 1. Scope and regulated entities
1. Scope: This Circular provides guidance on the establishment and operation of securities companies in Vietnam.
2. Regulated entities:
a) Securities companies;
b) Organizations and individuals involved in the establishment and operation of securities companies.
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For the purpose of this document, terms herein shall be construed as follows:
1. “securities company” means an enterprise that engages in securities business with one, some or all kinds of the following securities operations: securities brokerage, proprietary trading, securities underwriting, and securities investment consultancy.
2. “securities practitioner” refers to a person who has a securities practicing certificate and works in securities brokerage, proprietary trading, securities underwriting or securities investment consultancy department under a labour contract concluded with a securities company.
3. “valid copy” refers to a copy which is duly notarized or authenticated by a competent authority of Vietnam.
4. “valid application” refers to an application containing a full set of documents which are stipulated by this Circular and include contents properly and sufficiently declared in accordance with law regulations.
5. “working capital” means the difference between current assets and current liabilities at the time of calculation.
6. 3 “consolidation” means two or some securities companies (referred to as “consolidating securities companies”) consolidating into one new securities company (hereinafter referred to as “consolidated securities company”), which terminates the existence of consolidating securities companies.
7. 4 “merger” means one or some securities companies (hereinafter referred to as “acquired securities companies”) merging into another securities company (hereinafter referred to as “acquiring securities company”) by transferring all assets, legitimate rights, obligations and interests to the acquiring securities company, which terminates the existence of acquired securities companies.
8. 5 “loan” refers to a securities company’s provision or undertaking to provide a beneficiary or user with an amount of money, assets or securities for a defined length of time on agreed principles for repayment of the loan principal with or without interest(s).
9. 6 “approved audit organization” refers to an audit firm that has obtained an approval from the State Securities Commission of Vietnam (hereinafter referred to as the “SSC”) to conduct audits and examination of financial statements, financial data and other reports made by public interest entities in the securities sector.
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LICENSE FOR ESTABLISHMENT AND OPERATION
Section 1. ISSUANCE OF LICENSE FOR ESTABLISHMENT AND OPERATION
Article 3. License eligibility requirements
To be eligible for applying for an license for establishment and operation, a securities company must satisfy the following requirements:
1. The securities company must have the head office and facilities to conduct securities transactions in accordance with guidance of the SSC upon obtaining approval from the Ministry of Finance.
2. Its charter capital which is the paid-up capital must be not lower than the legal capital as required by law.
3. Director (General Director) of the securities company must satisfy requirements mentioned in Clause 3 Article 34 herein.
4. There are at least three securities practitioners available for each securities operation to be provided.
5. Structure of shareholders/ capital contributing members of a securities company:
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b) If a securities company is established in the form of a single-member limited liability company, its owner must be a commercial bank or an insurance company that must satisfy the requirements in Clause 7 of this Article or a foreign organization meeting the requirements in Clause 8 of this Article;
c) Founding shareholders or founding members of the securities company must hold at least 65% of its charter capital in which the commercial bank, insurance company or foreign organization meeting the requirements in Clause 8 of this Article must hold at least 30%.
d) The shareholder or member that holds 10% or more of the share capital or paid-in capital of a securities company and persons related to such shareholder or member are not allowed to hold more than 5% of the share capital or paid-in capital of another securities company;
dd) A securities company that is duly established and operating in Vietnam is not allowed to make capital contribution to another securities company in Vietnam.
6. An individual shall be eligible to make capital contribution to a securities company if he/she satisfies the following requirements:
a) He/she is not forbidden from establishing and managing enterprises in Vietnam in accordance with applicable law regulations and must be financially capable of making capital contribution to a securities company;
b) He/she must use his/her own money to make capital contribution; he/she is not allowed to use borrowed fund or trust fund to make capital contribution;
c) He/she must prove his/her financial capacity by providing the bank’s certification of his/her account balance in VND or a freely convertible currency. This balance must be at least equal to the estimated amount of capital contributed to the securities company. The bank’s certification must be issued within thirty days before the date on which the application for establishment of a securities company is certified sufficient and valid.
7. An organization shall be eligible to make capital contribution to a securities company if it satisfies the following requirements:
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b) It has a profitable business for two straight years preceding the year in which it is going to contribute money to the securities company and incurs no accumulated loss at the time of making capital contribution to the securities company;
c) A commercial bank or insurance company or another securities company that wants to make capital contribution must also satisfy the following requirements:
- It must not be under the operational control, special control or another warning state;
- It must satisfy all of requirements for making capital contribution or investments as regulated in specialized legislative documents.
d) An economic organization must also satisfy the following requirements:
- It has been in existence and continuously operating for at least five years before making capital contribution to a securities company;
- Its owner’s equity, exclusive of long-term assets, must not be smaller than the estimated amount of money to be contributed;
- Its working capital must not be smaller than the estimated amount of money to be contributed.
dd) It shall only use its owner’s equity and other legal sources of capital as defined by specialized law regulations to make capital contribution; it is not allowed to use trust funds to make capital contribution.
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a) It must engage in banking or securities or insurance business sector and has been operating for at least two straight years preceding the year in which it intends to make capital contribution to the securities company;
b) It must bear the regular inspection by foreign regulatory securities authority and obtain a written approval from this authority for its contribution of capital to a securities company in Vietnam;
c) The foreign regulatory securities authority and the SSC have concluded a bilateral or multilateral cooperation agreement on exchange of information and cooperation in managing and inspecting securities transactions and securities market;
d) It must satisfy relevant requirements in Clause 7 of this Article;
dd) The ratio of capital contributed by foreign organizations shall abide by applicable law regulations.
Article 4. Application for license for establishment and operation
1. An application for the license to establish and operate a securities company includes:
a) The application form for an license for establishment and operation (using the form stated in the Appendix I enclosed herewith);
b) The written statement about its facilities available for conduct of securities operations (using the form stated in the Appendix II enclosed herewith), enclosed with documentary evidence of its right to use the head office;
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- Name of securities company and business operations;
- Charter capital and ownership structure;
- Contents about the approval for drafted charter and business plan of securities company;
- Representative for founding shareholders or founding members who shall carry out procedures for establishment of the securities company.
d) The list of Director (General Director) and securities practitioners (using the form stated in the Appendix III enclosed herewith), enclosed with valid copies of their securities practicing certificates; personal profile of Director (General Director) (using the form stated in the Appendix IV enclosed herewith);
dd) The list of shareholders or capital contributing members which specifies ownership percentages (using the form stated in the Appendix V enclosed herewith);
e) The list of members of the Board of directors, the Board of members, the Board of Control (if any), enclosed with valid copies of their ID cards or unexpired Passports, criminal records and personal profile of each member (using the form stated in the Appendix IV enclosed herewith);
g) Documents proving capacity to make capital contribution by shareholders or capital contributing members of the securities company:
- For an individual: Valid copy of ID Card or unexpired Passport, personal profile (using the form stated in the Appendix IV enclosed herewith) and documents proving his/her financial capacity and satisfaction of the requirements in Clause 6 Article 3 herein; A shareholder or member who contributes ten percent or more of the charter capital is required to submit a criminal record too;
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Valid copies of the license for establishment and operation or business registration certificate or document having equivalent validity; the charter of company; the meeting minutes and decision made by the Board of directors or the Board of members or the Owner on capital contribution and appointment of representative for contributed capital, enclosed with valid copies of ID Card or unexpired Passport, criminal records, and personal profile of this representative (using the form stated in the Appendix IV enclosed herewith) and other documents proving its satisfaction of the requirements in Clause 7 Article 3 herein. An organization that plans to own more than ten percent of the charter capital of the securities company must also submit the criminal record of its legal representative;
If a parent company makes capital contribution, it must also submit consolidated financial statements of the past year which have been audited in accordance with regulations of the law on accounting and auditing;
A commercial bank or an insurance company must also submit valid copies of its regular reports on prudential ratios or capital adequacy ratio in the past two years as provided for by specialized law regulations.
h) The written approval for capital contribution granted by a regulatory authority to the commercial bank or insurance company or other documents proving that the capital contribution made to the securities company has been approved;
i) The draft Charter of company thoroughly approved by founding shareholders or founding members;
k) The business plan for the first three years for business operations specified in the application (using the form stated in the Appendix VI enclosed herewith), enclosed with operational procedures, internal control procedures and risk management procedures.
2. If a foreign organization makes capital contribution to the securities company, it must submit documents which have been issued by foreign regulatory authorities and legalized by appropriate consulates within 06 months before the date of the application. If a document written in a foreign language is submitted, it must be submitted with a Vietnamese translation attached. It must be provided by a registered translation service provider under the law of Vietnam.
3. The documents prescribed in Clause 1 and Clause 2 of this Article shall be made in one (01) set of originals, enclosed with their files. The set of originals shall be submitted by hand or by post to the SSC.
Article 5. Procedures for issuance of license for establishment and operation
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2. Founding shareholders or founding members of the securities company must complete the application for license for establishment and operation within 30 days from the receipt of the request from SSC. Over the abovementioned time limit, if founding shareholders or founding members fail to supplement documents as required, SSC may refuse that application for license for establishment and operation.
3. Founding shareholders or founding members must complete the construction of facilities and deposit paid-in capital to an escrow account within 90 days from the receipt of the written request from SSC. Charter capital of the securities company must be deposited to an escrow account opened at a commercial bank designated by SSC and shall be released and transferred to its account upon the issuance of the license for establishment and operation. Over the abovementioned time limit, SSC may refuse the application for license for establishment and operation.
4. Before issuing the license for establishment and operation, SSC must visit the head office of the securities company to inspect its facilities.
5. SSC shall issue the license for establishment and operation to the securities company within 07 days from the receipt of certification of capital escrow account as prescribed in Clause 3 of this Article, inspection results of facilities and other valid documents. SSC, if rejecting the application, must respond in writing and specify its justifications.
6. Within 12 months from the issuance of the license for establishment and operation, the licensed securities company must conduct securities business as regulated.
Article 6. Name of a securities company
1. Name of a securities company shall include the following components:
a) Type of enterprise;
b) The phrase “chứng khoán” (“securities”);
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2. A securities company must be named in conformity with the Law on Enterprises.
Article 7. Announcement about the license for establishment and operation
Within 07 days from the issuance of the license for establishment and operation, the licensed securities company must announce information about the License in accordance with regulations in Article 66 of the Law on Securities.
Section 2. AMENDMENTS TO A LICENSE FOR ESTABLISHMENT AND OPERATION
Article 8. Amendments to a license for establishment and operation
1. When adding or removing securities operations, changing company’s name or address of the head office, increasing or reducing the charter capital or changing the company’s legal representative, the securities company must submit an application for amendments to the license for establishment and operation to SSC.
2. An application for amendments to the license for establishment and operation shall be made in one (01) set of originals of required documents and submitted to SSC by hand or by post.
3. If an application is insufficient or invalid, the securities company must supplement documents as required within 30 days from the receipt of the written request from SSC. If the securities company fails to supplement documents as required within the abovementioned time limit, its application submitted to SSC shall be implicitly invalid.
4. If an application is approved, the securities company must announce information about the amended license for establishment and operation within the time limit and under the method as prescribed in Article 66 of the Law on Securities.
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1. When submitting an application for addition of securities operations, the securities company must satisfy the following requirements:
a) Its facilities must satisfy the requirements in Clause 1 Article 3 herein if an application for addition of securities brokerage and/or proprietary trading;
b) Its charter capital or owner’s equity must be not smaller than the legal capital required by law to conduct licensed securities operations and the ones to be conducted as specified in the application;
c) It must have enough securities practitioners to take charge of existing securities operations and hire at least three securities practitioners to take charge of securities operations to be conducted as specified in the application;
d) It must not be under an ordinary or special control or suspension as regulated by law within three months prior to the date of submission of the application.
2. An application for addition of securities operations includes:
a) The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
b) The written statement about its facilities available for conduct of additional securities brokerage and/or proprietary trading as specified in the application (using the form stated in the Appendix II enclosed herewith);
c) The Decision on addition of securities operation issued by the General Shareholders Meeting, the Board of members or the Owner;
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dd) The business plan for the first three years for additional securities operations as specified in the application (using the form stated in the Appendix VI enclosed herewith), enclosed with corresponding operational procedures, internal control procedures and risk management procedures;
e) The list of securities practitioners working at the securities company (using the form stated in the Appendix III enclosed herewith); The list and valid copies of securities practicing certificates and labour contracts of securities practitioners being in charge of additional securities operations;
g) The amended Charter approved by the General Shareholders Meeting, the Board of members or the Owner.
3. SSC shall conduct a physical inspection of facilities if an application for addition of securities brokerage and/or proprietary trading is submitted.
4. SSC shall grant an amended license for establishment and operation within 20 days from the receipt of a valid application as prescribed in Clause 2 of this Article and inspection results of facilities (if any). SSC, if rejecting the application, must respond in writing and specify its justifications.
Article 10. Removal of securities operations
1. Procedures for removal of securities brokerage:
a) The securities company shall submit an application for removal of securities brokerage. The application includes:
- The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
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- The plan for settlement of accounts of clients.
b) The securities company shall adopt and implement the plan and process for removal of securities brokerage as regulated by SSC;
c) Within 07 days from the receipt of the report on completion of the plan for settlement of clients’ accounts, SSC shall grant an amended license for establishment and operation and decision on revocation of Certificate of securities depository if the securities company does not carry out proprietary trading. SSC, if rejecting the application, must respond in writing and specify its justifications.
2. Procedures for removal of securities investment consultancy, securities underwriting and proprietary trading:
a) An application for removal of securities investment consultancy, securities underwriting and proprietary trading includes:
- The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
- The Decision on removal of securities operations issued by the General Shareholders Meeting, the Board of members or the Owner;
- Report on settlement of contracts signed with clients if securities underwriting or securities investment consultancy is removed; the plan for settlement of proprietary trading accounts if the proprietary trading is removed.
b) Within 07 working days from the receipt of a valid application as prescribed in Clause 2 of this Article, SSC shall issue an amended license for establishment and operation to the securities company. SSC, if rejecting the application, must respond in writing and specify its justifications.
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1. An application for change of company’s name includes:
a) The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
b) The Decision on change of company’s name issued by the General Shareholders Meeting, the Board of members or the Owner;
c) The amended Charter approved by the General Shareholders Meeting, the Board of members or the Owner.
2. An application for change of head office’s address includes:
a) The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
b) The written statement about facilities available for conduct of securities operations at the new head office (using the form stated in the Appendix II enclosed herewith), enclosed with documentary evidence of the right to use the head office;
c) The Decision on change of the head office’s address issued by the General Shareholders Meeting, the Board of members or the Owner.
3. The new head office of the securities company must satisfy the facilities requirements specified in Clause 1 Article 3 herein.
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5. Within 20 working days from the receipt of a valid application and inspection results of facilities (if any), SSC shall grant an amended license for establishment and operation to the securities company. SSC, if rejecting the application, must respond in writing and specify its justifications.
Article 12. Change in charter capital 7
1. An application for increase in the charter capital includes:
a) The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
b) The written confirmation of the capital increment issued by the bank where the escrow account is opened or the approved audit organization or the financial statements made upon the securities company’s completion of the augmentation of its charter capital, which have been audited by an approved audit organization. This clause does not apply to securities companies that raise charter capital with funds from their equity;
c) The report on ownership structure before and after the increase in the charter capital; the documents stated in Point d Section 2 Article 30 herein in case the increase in the charter capital results in the addition of new shareholders or members who hold 5% or more of the charter capital.
2. An application for decrease in the charter capital includes:
a) The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
b) The report on repurchase and cancellation of stocks or decrement of contributions for diminution of charter capital, which has been endorsed by an approved audit organization, or the financial statements audited by an approved audit organization upon the securities company’s completion of its repurchase and cancellation of stocks or decrement of contributions for diminution of charter capital;
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3. Within twenty (20) days from the receipt of a valid application including the documents as defined in Section 1 and 2 of this Article, SSC shall amend the license for establishment and operation of the securities company. SSC, if rejecting the application, must respond in writing and specify its justifications.
Article 13. Change of legal representative
1. The application for change of the securities company’s legal representative includes:
a) The application form for amendments to the license for establishment and operation (using the form stated in the Appendix VII enclosed herewith);
b) The Decision, made by the Board of directors or the Board of members or the Owner, on appointment of Chairperson of the Board of directors or Chairperson of the Board of members or Director (General Director), enclosed with personal profile (using the form stated in the Appendix IV enclosed herewith), valid copies of ID Card and securities practicing certificate of the new representative (if any);
c) The amended Charter approved by the General Shareholders Meeting, the Board of members or the Owner if there is a change in the title of the company’s legal representative.
2. Within twenty (20) days from the receipt of a valid application including the documents as defined in Section 1 of this Article, SSC shall amend the license for establishment and operation of the securities company. SSC, if rejecting the application, must respond in writing and specify its justifications.
Section 3. SUSPENSION AND REVOCATION OF THE LICENSE FOR ESTABLISHMENT AND OPERATION
Article 14. Suspension of a securities company 8
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a) There is intentionally distorted information in the application for issuance of or amendments to the license for establishment and operation;
b) Upon the expiration of the warning period (under ordinary or special control) as per regulations on prudential ratio and measures against securities institutions that fail to achieve the prudential ratio, the securities company fails to provide evidences of its rectification of alert situations (liquid capital ratio has reached at least one hundred eighty percent (180%) in three (03) consecutive months and such ratio in the last reporting period has been audited by an approved audit organization) and of annual gross loss on fifty percent (50%) or more of the charter capital or of the inferiority of the equity in the latest financial statement audited or examined to the legal capital as per business operations licensed;
c) Its operations are contrary to purposes or inconsistent with contents as defined in the license for establishment and operation;
d) It does not continuously abide by one of the requirements for licensing of establishment and operation as per Section 1, 2, 3 and 4 Article 3 herein;
dd) Other situations of suspension as per the laws on administrative sanctions in the sector of securities and stock market.
2. In situations of suspension as per Point a, b, c, d, Section 1 of this Article, SSC considers the formation and degree of violations to suspend one, some or all securities-related activities including brokerage, proprietary trading, investment consultancy, underwriting and depository services. Moreover, suspension period and scope must be clarified.
3. A securities company under suspension is not permitted to make or extend contracts related to business operations suspended. It shall bear the obligation to settle and transfer accounts at clients’ requests (if any), to have rectification plans and to report its execution of such plans at the request of SSC. A securities company, if suspended from proprietary trading, has permission to only sell but not to increase business investments, except for indispensable purchases, which rectify transaction errors, odd-lot transactions or acquisition of interests from securities in its holding as per current laws.
Article 7. Revocation of license for establishment and operation 9
1. A securities company's license for establishment and operation shall be revoked in the following events:
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b) Violations as prescribed in Point a, c, d Section 1 Article 14 of this Circular have not been rectified in sixty (60) days upon the suspension of operations;
c) Situations as stated in Point b Section 1 Article 14 of this Circular have not been rectified in six (06) months upon the suspension of operations;
d) The securities company's period of operation expires as per its Charter or it undergoes voluntary dissolution;
dd) The securities company goes bankrupt;
e) The securities company consolidates or is merged.
2. During the progress of dissolution or bankruptcy, the securities company must conform to these principles:
a) Members of the Board of Directors or Board of members, Owner, Director or General Director, and the legal representative of the securities company shall be held liable for the integrity and accuracy of documents on dissolution as per Point h Section 3 of this Article;
b) If documents on settlement of clients’ securities trading accounts and on dissolution are inaccurate or falsified, the individuals as defined in Point a of this Section shall be jointly liable for settling outstanding debts, taxes and workers’ benefits and assume personal liabilities for consequences arising in five (05) years’ time upon the submission of dissolution documents to SSC.
3. The formalities for revocation of a license for establishment and operation in situations as stated in Point a, b, c, Section 1 of this Article shall include:
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b) In twenty four (24) hours from the receipt of SSC’s decision, the securities company is held responsible for announcing such decision. The securities company is responsible for discontinuing all business operations licensed and not engaging in new contracts related to its business operations;
c) Within seven (07) working days upon the securities company’s receipt of SSC’s decision, the former’s Board of Directors or Board of members must convene an extraordinary General Shareholders Meeting or Board of Members’ extraordinary conclave to ratify the dissolution and decide settlement solutions for creditors and bearers of relevant interests and duties. In twenty four (24) hours upon the decision by the General Shareholders Meeting, Board of members or Owner on the dissolution of the securities company, such company shall be responsible for announcing its dissolution and settlement plans for creditors and bearers of relevant interests and duties;
d) Within fifteen (15) days from the receipt of SSC's decision, the securities company must report to SSC about the plans for settlement of proprietary trading accounts and clients' contracts in effect in connection with securities trading operations in progress and clients’ securities trading accounts (if any) at such company. Basic details of the said plans include:
- Time and methods of dissemination of information and notice to every client about the termination of all securities-related business operations licensed;
- The expected and minimum time for final settlement of transaction accounts (to be closed or transferred) at clients’ requests shall be thirty (30) days;
- The time for desistance of new accounts;
- The expected time for discontinuance of transactions on stock exchanges;
- The time for stoppage of clients’ withdrawal or deposit of money;
- The expected time for finalization of the balance of clients’ accounts not due for final settlement;
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- Plans for settlement of proprietary trading accounts;
- Plans for clients’ contracts in effect in relation to securities business operations in progress.
dd) Within forty five (45) days upon SSC’s expression to the plans as defined in Point d of this Section, the securities company must implement such plans in the following order:
- Publish information and give notice to every client according to plan;
- Settle accounts and remit (transfer) money and securities in full at clients' requests;
- At the end of the time limit for final settlement of accounts, a full list of clients' accounts, whose owners have not appeared for final settlement, and of each account's current balance of money and securities shall be made;
- Within five (05) working days upon the expiration of the time limit for final settlement of accounts at clients’ requests, the securities company shall report to SSC about the accounts settled and not settled, plus each unsettled account's balance of money and securities, the implementation of plans for closure of proprietary trading accounts and clients’ contracts in effect in relation to securities business operations in progress;
- The securities company can negotiate the transfer of clients’ accounts unresolved to other securities companies.
In situations of license revocation as stated in Point b Section 2 Article 70 of the Law on Securities, SSC is entitled to designate an alternative securities company to acquire clients’ accounts unresolved from the securities company stripped of the license for establishment and operation. In this event, a proxy between two companies mentioned above is automatically enacted.
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e) Within five (05) working days upon the completion of the return of all clients’ accounts, the securities company reports to SSC about the settlement of clients’ securities trading accounts unresolved. This clause does not apply to securities companies settling all clients' accounts within the time limit for final settlement of accounts at clients’ requests;
g) Within five (05) working days upon SSC’s notice of its receipt of the report as prescribed in Point dd and e of this Section, the securities company shall go through dissolution formalities as per the Law on enterprises. SSC shall publish its notice on its website;
h) Within seven (07) working days after such formalities complete, the securities company shall have its legal representative or another individual, according to Point dd of this Section, to submit the following documents on dissolution to SSC:
- The report on dissolution process and settlement of debts and payables, plus the original of the license for establishment and operation of the securities company;
- Papers on police’s revoking the corporate seal, on fulfillment of taxes and duties with tax authorities, and on affirmation of debts and payables fully settled;
- The financial statement audited by an approved audit organization upon the fruition of the dissolution process.
i) Within seven (07) working days from the receipt of all valid documents as defined in Point h of this Section, SSC shall issue a decision to revoke the license for establishment and operation and announce information as per regulations.
4. The following formalities apply to the revocation of a license for establishment and operation in the event stated in Point d Section 1 of this Article:
a) In twenty four (24) hours upon the decision by the General Shareholders Meeting, Board of Members or Owner on the dissolution of the securities company, such company shall be responsible for announcing the information on its dissolution;
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c) Within ten (10) working days, SSC shall respond in writing about such plans;
d) The securities company, when receiving SSC’s reply, shall settle clients' accounts as per Point dd Section 3 of this Article;
dd) After settling and transferring clients' accounts to other securities companies on written agreements, the securities company shall submit the application for approval for dissolution. Such application shall be made in one (01) set of originals and presented to SSC by hand or by post, including:
- The application form for approval for dissolution (using the form stated in the Appendix VIII enclosed herewith);
- The decision issued by the General Shareholders Meeting, Board of Members or Owner on the dissolution of the securities company;
- The report on final settlement of clients’ securities trading accounts and plans for finalization and settlement of contracts, interests and financial liabilities of the company.
e) Within seven (07) working days from the receipt of the application as defined in Point dd of this Section, SSC shall issue a decision to approve the securities company’s proceedings of dissolution. SSC, if rejecting the application, must respond in writing and specify its justifications;
g) In twenty four (24) hours from the receipt of SSC’s decision, the securities company is held responsible for announcing the approval for its dissolution;
h) The formalities for dissolution are subject to the Law on Enterprises;
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k) Within seven (07) working days from the receipt of an application including valid documents as defined in Point h Section 3 of this Article, SSC shall issue a decision to revoke the license for establishment and operation and announce information as per regulations.
5. The following formalities apply to the revocation of a license for establishment and operation in the event stated in Point dd Section 1 of this Article:
a) In twenty four (24) hours upon a securities company’s obtainment of a decision to initiate or declare bankruptcy through summary procedures as per Section 1 Article 105 of the Law on Bankruptcy, such company must announce such decision;
b) Within five (05) working days from the date of announcement as stated in Point a of this Section, the securities company having licensed brokerage shall set up plans for settlement of clients’ securities trading accounts as per Point d Section 3 of this Article;
c) The securities company shall settle clients’ accounts as per Point dd Section 3 of this Article;
d) The securities company shall execute the bankruptcy formalities according to the Law on Bankruptcy;
dd) Within thirty (30) days from the receipt of the decision to declare the securities company’s bankruptcy, SSC shall issue its decision to revoke such company’s license for establishment and operation and announce information as per regulations.
6. The following formalities apply to the revocation of a license for establishment and operation in the event stated in Point e Section 1 of this Article:
SSC shall decide to revoke the license for establishment and operation of consolidating securities company or acquired securities company while reissuing the aforesaid license to the consolidated securities company or the acquiring securities company as per Section 6 Article 67 of this Circular.
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ORGANIZATION OF A SECURITIES COMPANY
Article 16. Principles of organization
1. Branches, transaction offices and representative offices are affiliates of a securities company. The securities company must take responsibility for the operation of its branches, transaction offices and representative offices.
2. Names of branches, transaction offices and representative offices must contain the securities company's name, phrases such as "branch, transaction office or representative office", and proper name.
Article 17. General procedures
1. A securities company must obtain an approval from SSC when establishing, shutting down or changing address of its branch, transaction office or representative office. A securities company, when changing name of its branch or transaction office, making change in securities operations carried out at its branch or changing the branch manager, must submit an application to SSC for amendments to the Decision on establishment of branch or transaction office.
2. The application for approval or amendments to the Decision on establishment or branch or transaction office in cases mentioned in Clause 1 of this Article shall be made in one (01) set of originals and submitted to SSC by hand or by post.
3. In case of insufficient or invalid application, the securities company must supplement documents as required within thirty (30) days from the receipt of the written request from SSC. If the securities company fails to supplement documents as required within the abovementioned time limit, its application submitted to SSC shall be implicitly invalid.
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Article 18. Establishing a branch
1. Branches are affiliates of a securities company. These branches are permitted to carry out securities operations as assigned or authorized by the securities company. A branch is not allowed to carry out operations other than the licensed ones of the securities company.
2. When establishing a branch, the following requirements must be satisfied:
a) At the time of submission of application for branch establishment, the securities company must not be under an ordinary or special control or suspension as regulated by applicable laws;
b) It does not incur any incur administrative penalties for violations against regulations on securities and securities market within six (06) months prior to the date of submission of application for branch establishment to SSC;
c) Branch office and facilities must be available to carry out authorized securities operations;
d) Branch manager must satisfy the requirements mentioned in Point a, d Clause 3 Article 34 herein, possess a securities practicing certificate in conformity with the branch’s operations, have at least two (02) years of experience in financial, banking or securities sector and at least one (01) year of experience in executive position;
dd) The securities company must have enough securities practitioners to carry out securities operations at its head office, branch and/or transaction office and at least two (02) persons for each securities operation carried out at its branch to be established.
3. An application for branch establishment includes:
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b) The decision by the Board of Directors, the Board of Members or the Owner of the securities company on the establishment of branch and securities operations to be carried out at its branch;
c) The written operational procedures, internal control procedures and/or risk management procedures to be followed at the branch;
d) The written statement about facilities available for conduct of securities operations as assigned or authorized by the securities company (using the form stated in the Appendix II enclosed herewith), enclosed with documentary evidence of the right to use the branch office;
dd) The list of all securities practitioners of the securities company; the list of branch manager and securities practitioners working at the branch to be established, enclosed with valid copies of their securities practicing certificates and labour contracts signed by and between the securities company and securities practitioners working at the branch; the decision on appointment and personal profile of the branch manager (using the form stated in the Appendix IV enclosed herewith).
4. Before granting a decision on approval for the branch establishment, SSC shall conduct a physical inspection of facilities at the securities company's branch that plans to carry out securities brokerage and/or proprietary trading.
5. Within fifteen (15) working days from the receipt of a valid application and inspection results of facilities (if any), SSC shall grant a decision on approval for branch establishment. SSC, if rejecting the application, must respond in writing and specify its justifications.
6. The securities company’s branch must be put into official operation within three (03) months as from the receipt of approval for branch establishment from SSC. Over the abovementioned time limit, SSC shall revoke its decision on approval for branch establishment.
Procedures for closure of a branch:
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a) The application form for branch closure (using the form stated in the Appendix IX enclosed herewith);
b) The decision issued by the Board of Directors, the Board of Members or the Owner of the securities company on closure of its branch;
c) Plan for settlement of clients’ contracts in effect, including service contracts for provision of securities brokerage, investment consultancy and underwriting. Such plan must specify the announcement of information to clients about the branch closure and the time limit for closing accounts by clients which must be not less than fifteen (15) days.
2. Within fifteen (15) working days from the receipt of the valid application including all documents as prescribed in Section 1 of this Article, SSC shall make a decision on approval for branch closure. SSC, if rejecting the application, must respond in writing and specify its justifications.
3. The securities company shall shut down its branch according to the plan submitted to SSC.
4. Securities company is required to submit the report on branch closure. Within five (05) days from the receipt of the report on branch closure submitted by the securities company, SSC shall make decision on revocation of the decision on approval for branch establishment.
Article 20. Changing branch address and amending decision on approval for branch establishment
1. The application for change of branch address includes:
a) The application form for change of branch address (using the form stated in the Appendix IX enclosed herewith);
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c) The decision made by the Board of Directors, the Board of Members or the Owner on change of branch address.
2. The application for addition of securities operations of a branch includes:
a) The application form for amendments to the decision on approval for branch establishment (using the form stated in the Appendix X enclosed herewith);
b) The written statement about its facilities available for conduct of additional securities operations which are securities brokerage and/or proprietary trading as specified in the application (using the form stated in the Appendix II enclosed herewith);
c) The Decision made by the Board of Directors, the Board of Members or the Owner on addition of securities operations of a branch;
d) The list of securities practitioners working at departments of the securities company, its branches/ transactions offices and those taking charge of additional securities operations of the branch, enclosed with valid copies of their securities practicing certificates and labour contracts signed with the securities company.
3. The application for removal of securities operations of a branch includes:
a) The application form for amendments to the decision on approval for branch establishment (using the form stated in the Appendix X enclosed herewith);
b) The Decision made by the Board of Directors, the Board of Members or the Owner on removal of securities operations of a branch;
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4. The application for change of branch name includes:
a) The application form for amendments to the decision on approval for branch establishment (using the form stated in the Appendix X enclosed herewith);
b) The decision made by the Board of Directors, the Board of Members or the Owner on change of branch name.
5. The application for change of branch manager includes:
a) The application form for amendments to the decision on approval for branch establishment (using the form stated in the Appendix X enclosed herewith);
b) The Decision made by the Board of Directors, the Board of Members or the Owner on change of branch manager;
c) The personal profile of the branch manager (using the form stated in the Appendix IV enclosed herewith), enclosed with valid copies of ID Card, labour contract and securities practicing certificate in conformity with securities operations carried out at the branch.
6. If changing the branch address, the securities company must satisfy the facilities requirements as specified in Point c Clause 2 Article 18 herein. Before giving approval for change of branch address, SSC must conduct a physical inspection of facilities of the new branch office if such branch carries out securities brokerage and/or proprietary trading.
7. Within fifteen (15) working days from the receipt of a valid application and inspection results of facilities, if available, in case of addition of securities operations of a branch or change of branch address, SSC shall grant a decision on amendments to the decision on approval for branch establishment. SSC, if rejecting the application, must respond in writing and specify its justifications.
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Article 21. Establishing a transaction office
1. Transaction office is an affiliate of the head office or the branch of a securities company. A transaction office must be located in the same province or city where the securities company’s head office or branch is located. The transaction office shall assist the securities company’s head office or branch to which it is affiliated in carrying out securities brokerage, investment consultancy and depository.
2. When establishing a transaction office, the following requirements must be satisfied:
a) At the time of submission of application for establishment of transaction office, the securities company must not be under an ordinary or special control or suspension as regulated by applicable laws;
b) It does not incur any incur administrative penalties for violations against regulations on securities and securities market within six (06) months prior to the date of submission of application for establishment of transaction office to SSC;
c) Location and necessary facilities of the transaction office must be available to carry out authorized securities operations;
d) The securities company must have enough securities practitioners to carry out securities operations at its head office, existing branches and transaction offices and at least two (02) securities practitioners working at the transaction office to be established.
3. The application for establishment of transaction office includes:
a) The application form for establishment of transaction office (using the form stated in the Appendix IX enclosed herewith);
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c) The written statement about facilities available for conduct of authorized securities operations by the transaction office (using the form stated in the Appendix II enclosed herewith), enclosed with documentary evidence of its right to use location of the transaction office;
d) The Decision made by the Board of Directors, the Board of Members or the Owner of the securities company on establishment of transaction office;
dd) The list of securities practitioners working at the securities company; the list of securities practitioners working at the transaction office to be established, enclosed with valid copies of their securities practicing certificates and labour contracts signed with the securities company.
4. Before granting a decision on approval for establishment of transaction office, SSC must conduct a physical inspection of its facilities.
5. Within fifteen (15) working days from the receipt of a valid application and inspection results of facilities (if any), SSC shall grant a decision on approval for branch establishment. SSC, if rejecting the application, must respond in writing and specify its justifications.
6. The securities company’s transaction office must be put into official operation within three (03) months as from the receipt of decision on approval for establishment of transaction office from SSC. Over the abovementioned time limit, SSC shall revoke its decision on approval for establishment of transaction office.
Article 22. Closing a transaction office
1. The application for closure of transaction office includes:
a) The application form for closure of transaction office (using the form stated in the Appendix IX enclosed herewith);
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c) Plan for settlement of clients’ contracts in effect, which must specify the announcement of information to clients about the closure of transaction office and the time limit for closing accounts by clients which must be not less than fifteen (15) days.
2. Within fifteen (15) working days from the receipt of the valid application including all documents as prescribed in Section 1 of this Article, SSC shall make a decision on approval for closure of transaction office. SSC, if rejecting the application, must respond in writing and specify its justifications.
3. The securities company shall shut down its transaction office according to the plan submitted to SSC.
4. Securities company is required to submit the report on closure of transaction office. Within five (05) days from the receipt of the report on closure of transaction office submitted by the securities company, SSC shall make decision on revocation of the decision on approval for establishment of transaction office.
1. The application for change of transaction office’s address includes:
a) The application form for change of transaction office’s address (using the form stated in the Appendix IX enclosed herewith);
b) The written statement about facilities of the new location of transaction office for conduct of authorized securities operations (using the form stated in the Appendix II enclosed herewith), enclosed with documentary evidence of its right to use location of the transaction office;
c) The decision made by the Board of Directors, the Board of Members or the Owner on change of transaction office’s address.
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a) The application form for amendments to the decision on approval for establishment of transaction office (using the form stated in the Appendix X enclosed herewith);
b) The decision made by the Board of Directors, the Board of Members or the Owner on change of transaction office’s name.
3. If changing the transaction office’s address, the securities company must satisfy the facilities requirements as specified in Point c Clause 2 Article 21 herein. SSC must conduct a physical inspection of facilities at the new location of transaction office.
4. Within fifteen (15) working days from the receipt of a valid application and inspection results of facilities, SSC shall grant a decision on amendments to the decision on approval for establishment of transaction office. SSC, if rejecting the application, must respond in writing and specify its justifications.
Section 4. REPRESENTATIVE OFFICES OF A SECURITIES COMPANY
Article 24. Establishing a representative office
1. Representative offices are affiliates of a securities company. Location of a representative office must not be in the same province or city where the securities company’s head office or branch is located.
2. A representative office may perform one, some or all activities mentioned below:
a) Performing functions of a liaison office and conducting market research activities;
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c) Promoting and supervising the implementation of projects, contracts and/or agreements signed with relevant parties in connection with the securities company’s operations.
3. A representative office is not allowed to perform business operations as well as transactional operations relating securities. It is not allowed to directly or indirectly conclude any economic contracts.
4. When establishing a representative office, the following requirements must be satisfied:
a) At the time of submission of application for establishment of representative office, the securities company must not be under an ordinary or special control or suspension as regulated by applicable laws;
b) It does not incur any incur administrative penalties for violations against regulations on securities and securities market within six (06) months prior to the date of submission of application for establishment of representative office to SSC;
c) There is a location available for the representative office.
5. The application for establishment of representative office includes:
a) The application form for establishment of representative office (using the form stated in the Appendix IX enclosed herewith);
b) The Decision made by the Board of Directors, the Board of Members or the Owner of the securities company on the establishment of representative office, which must specify operations of the representative office;
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6. Within fifteen (15) working days from the receipt of a valid application, SSC shall grant a decision on approval for establishment of representative office. SSC, if rejecting the application, must respond in writing and specify its justifications.
Article 25. Closing a representative office
1. Representative office of a securities company shuts down in the following cases:
a) The securities company voluntarily shuts down its representative office;
b) There is a branch is established in or the head office of the securities company is moved to the province or city where the representative office is located.
2. The application for closure of representative office includes:
a) The application form for closure of representative office (using the form stated in the Appendix IX enclosed herewith);
b) The decision issued by the Board of Directors, the Board of Members or the Owner of the securities company on closure of its representative office;
3. Within fifteen (15) working days from the receipt of the valid application including all documents as prescribed in Section 2 of this Article, SSC shall make a decision on approval for closure of representative office. SSC, if rejecting the application, must respond in writing and specify its justifications.
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1. The application for change of representative office’s address includes:
a) The application form for change of representative office’s address (using the form stated in the Appendix IX enclosed herewith);
b) The decision made by the Board of Directors, the Board of Members or the Owner of the securities company on change of its representative office’s address.
c) Documentary evidence of the right to use the location of representative office.
2. The application for change of representative office’s name includes:
a) The application form for amendments to the decision on approval for establishment of representative office (using the form stated in the Appendix X enclosed herewith);
b) The decision made by the Board of Directors, the Board of Members or the Owner of the securities company on change of its representative office’s name.
3. Within fifteen (15) working days from the receipt of a valid application, SSC shall grant a decision on amendments to the decision on approval for establishment of representative office. SSC, if rejecting the application, must respond in writing and specify its justifications.
Section 5. OUTWARD INVESTMENT 10
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1. A securities company, when setting up a branch or representative office abroad or making an outward investment, must fulfill these requirements:
a) It carries out a project to open an overseas branch or representative office or to make an outward investment, which was approved in writing by the General shareholders Meeting, Board of Members or Owner;
b) It achieves the prudential ratio after it has allocated funds for the overseas branch or outward investment;
c) It maintains the equity’s balance, less the funds allocated to its overseas branch or outward investment, not to go beneath the legal capital as defined for its licensed business operations;
d) Scope of operations and investment fields must abide by the license for establishment and operation of the securities company in Vietnam.
2. The securities company’s application for approval for overseas branch or representative office or outward investment shall be executed in one set of originals and submitted to SSC by hand or by post. The application includes:
a) The application form for approval for overseas branch or representative office or outward investment by the securities company (using the form stated in the Appendix X(a) enclosed herewith);
b) The meeting minutes and resolution made by the General Shareholders Meeting, the Board of Members or Owner on the establishment of the overseas branch or representative office or on the outward investment in conformity to the securities company’s Charter;
c) The plan for overseas operations or outward investments, that states the expected amount of investment, funding sources, business partners (if any), investment fields, details and scope of operations, business operation schemes and other relevant information in the first three years.
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4. The securities company, after obtaining a written approval from SSC, shall proceed to set up the overseas branch or representative office or make the outward investment as per the laws on investment and foreign exchange management.
5. Within fifteen (15) days upon the foreign authorities’ consent to the establishment of the branch or representative office or their approval for the foreign investment project, the securities company must report to SSC. Such report shall include:
a) The address and personnel of the branch or representative office, investment value, date of opening, enclosed with written approvals by Vietnamese authorities in charge of investment and foreign exchange management;
b) Documents submitted to foreign authorities, enclosed with valid copies of licenses, written approvals or equivalent papers that have been issued by foreign competent authorities.
6. Within fifteen (15) days upon the securities company’s closure of the overseas branch or representative office or revocation of the outward investments, such company must send a report thereof to SSC. Such report shall include:
a) The name and address of the overseas branch or representative office and reasons for shutdown;
b) The securities company’s liabilities for assets, rights, duties and interests related to the overseas branch or representative office or the investment, enclosed with valid copies of written approvals or equivalent papers, if available, granted by foreign competent authorities.
MANAGEMENT OF SECURITIES COMPANIES
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1. Securities companies must comply with regulations of the Law on securities, the Law on Enterprises and other laws on corporate management. Each securities company must formulate its own Charter in conformity with the template of the Charter stated in the Appendix XI enclosed herewith.
2. Securities companies must be honest with their clients, not infringe upon assets, legitimate rights and interests of their clients.
3. Each securities company must clearly assign duties of the General Shareholders Meeting, the Board of Members, the Owner, the Board of Directors, the Board of Control and the Board of Management in accordance with regulations of the Law on Securities, the Law on Enterprises and other relevant laws;
4. Each securities company must establish a communication system with the aim of sufficiently providing information to all shareholders/ members as well as ensuring their legitimate rights and interests.
Article 28. Management system of a securities company
1. The management system of a securities company which is a joint-stock company shall be comprised of the General Shareholders Meeting, the Board of Directors, the Board of Control and the Board of Management.
2. The management system of a securities company which is a single-member or multi-member limited liability company shall be comprised of the Board of Members, the Board of Control and the Board of Management.
3. 11 A securities company can have one (01) or many legal representatives according to its Charter. The Charter of the securities company shall define responsibilities, quantity, titles, rights and duties of each legal representative. If a securities company changes its legal representative, it shall submit an application for amendments to the license for establishment and operation to SSC according to Article 13 herein. The following are specific circumstances regarding a securities company’s legal representative:
a) The legal representative of a securities company where one (01) legal representative exists shall be the chairman of the Board of Directors or the Board of Members, or the Director or General Director. Unless otherwise stated in the Company’s Charter, its legal representative shall be the chairman of the Board of Directors or the Board of Members;
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Article 29. Shareholders, members
1. Founding shareholders or members of a securities company are not allowed to transfer their shares or initial capital contributions within a period of three (03) years from the issued date of the license for establishment and operation, except shares/ capital contributions are transferred between founding shareholders or members. Commercial banks, insurance companies or foreign organizations as defined in Clause 7, Clause 8 Article 3 herein, during the above-mentioned period, must hold at least thirty percent (30%) of the charter capital of such securities company.
2. The shareholder or member that holds ten percent (10%) or more of the share capital or paid-in capital of a securities company and persons related to such shareholder or member are not allowed to hold more than five percent (5%) of the share capital or paid-in capital of another securities company.
3. The shareholder or member that holds ten percent (10%) or more of the charter capital of a securities company is not allow to take unfair advantage of this situation to harm rights and interests of such securities company or other shareholders.
4. The shareholder or member that holds ten percent (10%) or more of the charter capital of a securities company is required to inform the securities company within twenty four (24) hours from the occurrence of one of the following events:
a) Shares or capital contributions are blockaded, pledged or handled according to a court's ruling;
b) That shareholder or member being an organization decides to change its name or merger, divide, dissolve or declare bankrupt.
5. The securities company must report to SSC of the events stated in Clause 4 of this Article within five (05) days from the receipt of the relevant shareholder or member's notice thereof.
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2. An application for approval for such transaction includes:
a) The application for approval for transfer of shares or capital contributions (using the form stated in the Appendix XII enclosed herewith);
b) The valid copy of the written request for transfer made by and between the parties;
c) The principle agreement on the transfer as approved by the transferor and the transferee;
d) The personal profile (using the form stated in the Appendix IV enclosed herewith), enclosed with the valid copy of ID Card if the new shareholder is an individual or the business registration certificate if the new shareholder is a legal entity;
dd) The Decisions on transfer issued by the Board of Directors, the Board of Members or the Owners of the transferor and the transferee if they are entities;
e) The written confirmation of the securities company of the validity of such transfer.
g) In case a transaction alters the ownership of shares or capital contributions with a foreign party, documents written in a foreign language must be submitted with their Vietnamese translations attached. Such translations must be provided by a registered translation service provider under the law of Vietnam. Documents issued by foreign regulatory authorities must be legalized by appropriate consulates in accordance with relevant laws.
3. The application for approval for transaction shall be made in one (01) set of originals and presented to SSC by hand or by post.
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5. Relevant parties must complete transfer procedures within ninety (90) days from the receipt of the effective date of SSC's written approval. If relevant parties fail to complete transfer procedures within the abovementioned time limit, SSC’s written approval shall be implicitly invalid.
6. Within five (05) days from the completion of transfer procedures, the securities company must send a report on transfer results to SSC (using the form stated in the Appendix XIII enclosed herewith);
Article 31. General Shareholders Meeting, Board of Members
1. A securities company must formulate internal procedures for convening and voting at the meetings of the General Shareholders Meeting or the Board of Members. Such internal procedures must be approved by the General Shareholders Meeting or the Board of Members.
2. The securities company which is a joint-stock company is required to convene the annual general meeting of shareholders within four (04) months from the end of a fiscal year. If failing to convene a meeting within the abovementioned period, the securities company must report in writing to SSC and convene the annual general meeting of shareholders within the period of the succeeding two (02) months.
3. The securities company must send a written report on meeting results of the General Shareholders Meeting or the Board of Members, enclosed with the resolution and relevant documents, to SSC within five (05) working days from the end of the meeting.
4. 13 General Shareholders Meeting, Board of Members or Owner of a securities company shall have financial statements and prudential ratio statements audited by an approved audit organization. The securities company cannot replace such approved audit organization with another in one fiscal year unless such replacement is appointed by the parent company or the approved audit organization being employed is suspended or stripped of the permission to conduct audits.
Article 32. Board of Directors, Board of Members
1. Members of the Board of Directors or the Board of Members of a securities company shall not concurrently participate in the Board of Directors or the Board of Members or hold position of Director (General Director) in another securities company.
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3. Functions and duties of each member of the Board of Directors or the Board of Members must be also specified.
4. The Board of Directors or the Board of Members must formulate internal procedures for convening and voting at the meetings of the Board of Directors or the Board of Members.
5. The Board of Directors or the Board of Members must establish a specialized department in charge of or appoint employees to take charge of risk management as regulated in Clause 1 Article 35 herein and internal control as regulated in Clause 1 Article 36 herein.
1. Head of the Board of Control is not allowed to act as a member of the Board of Control or as a manager in another securities company.
2. The Board of Control must formulate the control procedures which must be approved by the General Shareholders Meeting or the Board of Members.
3. The Board of Control that is comprised of two (02) members or more shall meet at least two (02) times per year. Meeting contents should be sufficiently and accurately recorded and kept in accordance with applicable regulations.
4. If a member of the Board of Directors, the Board of Members or the Board of Management is found to have transgressed the laws and/or the company’s Charter and resulted in transgressions of the rights and interests of the securities company, its shareholders, owner or clients, the Board of Control shall be responsible for demanding the transgressor to generate report(s) within a limited time or for convening the General Shareholders Meeting, the Board of Members or the Owner for settlement. The Board of Control must inform SSC in writing of violations of laws within seven (07) working days from the detection of such violations.
Article 34. Board of Management
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2. Director (General Director) and Deputy Director (Deputy General Director) are not allowed to concurrently work for another securities company or a fund management company or another enterprise. Director (General Director) of a securities company is not allowed to participate in the Board of Directors or the Board of Members of another securities company.
3. Director (General Director) of a securities company must meet the following criteria:
a) He/she has never faced criminal prosecution, imprisonment or revocation of his/her practicing certificate in accordance with law regulations;
b) He/she must have at least three (03) years of experience in financial, securities and/or securities sector and at least three (03) years of experience in executive position;
c) He/she must possess a practicing certificate in financial analysis or fund management;
d) He/she did not incur any penalties imposed by SSC for violations against regulations on securities and securities market within the last two (02) years.
4. A Deputy Director (or Deputy General Director) in charge of professional divisions of the securities company must satisfy the requirements mentioned in Point a, d Clause 3 of this Article, possess securities practicing certificate conformable to securities operations undertaken, have at least two (02) years of experience in financial, banking and/or securities sector and at least two (02) years of experience in executive position.
5. The securities company must formulate regulations on operation of the Board of Management which must be approved by the Board of Directors or the Board of Members. Regulations on operation of the Board of Management must include the following contents:
a) Particular duties and missions of each member of the Board of Management;
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c) Responsibilities of the Board of Management for reporting to the Board of Directors and the Board of Control.
1. In course of risk management, the Board of Directors or the Board of Members of a securities company shall discharge the following duties:
a) Promulgate risk management policies and strategies in the Company's operations;
b) Inspect and assess the congruity and performance of the existing risk management system of the securities company.
2. The Board of Management must institute and maintain a risk management system in order to preclude probable risks against the interests of the securities company and clients. The risk management system has the following missions:
a) Determine the securities company’s risk policies;
b) Determine the securities company’s risk tolerance;
c) Identify the securities company’s risks;
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dd) Supervise, prevent, detect and handle risks;
e) Report on risk management.
3. SSC shall provide regulations on risk management systems of securities companies.
1. The securities company which is a public joint stock company or which is licensed to carry out securities brokerage activities must establish an internal audit committee of the Board of Directors (or the Board of Members). An internal audit committee shall carry the following functions and missions:
a) Carry out independent assessment of the conformity and compliance by the securities company with applicable laws and policies, the company’s Charter, decisions by General Shareholders Meeting, the Owner, the Board of Directors or the Board of Members;
b) Inspect, examine and evaluate the adequacy, efficiency and upshot of the internal control system of the Board of Management so as to improve that system;
c) Assess business activities’ abidance by internal policies and procedures;
d) Provide counsels for the establishment of internal policies and procedures;
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e) Undertake internal assessments and audits through financial information and business operations;
g) Appraise procedures for identifying, evaluating and managing risks in operations of the securities company;
h) Assess the effectiveness of the securities company’s operations;
i) Evaluate the observance of contracted undertakings;
k) Carry out information technology controls;
l) Investigate internal violations in the securities company;
m) Perform internal audits in the securities company and its subsidiaries.
2. Operational principles of the internal audit committee:
a) Independence: the internal audit committee is independent from other departments of the securities company, including executive committee; internal audit activities are independent from the management activities and operations of the securities company; employees in charge of internal audit are not allowed to perform duties relating to internal audit subjects and work in professional departments of the securities company such as brokerage, proprietary trading, analysis, investment consultancy, underwriting and risk management;
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Members of the internal audit committee must demonstrate the objectivity in the process of gathering, assessing and communicating information about their activities or processes or systems being audited. They should make a fair assessment of all relevant issues and not be dominated by private interests or goals by anyone else when giving their opinions or assessment results;
c) Honesty: members of the internal audit committee must perform their duties in an honest, diligent and responsible manner; comply with the laws and carry out their duties publicly in accordance with the law and code of professional ethics;
d) Security: members of the internal audit committee should respect the value and ownership of information received, shall be not allowed to disclose received information without a valid authorization unless they are obliged to disclose information in accordance with the law and internal regulations of the securities company.
3. Requirements to be satisfied by members of the internal audit committee:
a) They have not incurred pecuniary fines or severe penalties for violations against regulations on securities, banking or insurance within the last five (05) years before the year of appointment;
b) Head of the internal audit committee must possess expertise in law, accounting and/or auditing. Moreover, the holder of this position must have sufficient experience, prestige and authority to carry out assignments in an efficient manner;
c) A member of the internal audit committee must have no intimacy with heads of specialized divisions, securities practitioners, Director (General Director), Deputy Directors (Deputy General Directors), or branch managers of the securities company;
d) They must possess credentials in fundamental knowledge of securities and securities market, and certificates of completion of courses in laws on securities and securities market or practicing certificates for securities practitioners;
dd) They must not hold concurrent positions in the securities company.
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1. The securities company must establish an internal control committee of the Board of Management (or the Board of Senior Management). An internal control system of a securities company includes processes, organizational structure, independent and specialized personnel.
2. The internal control committee of the Board of Management shall be responsible for:
a) Inspecting the compliance by relevant divisions and securities practitioners of the securities company with the laws, the company’s Charter, decisions by the General Shareholders Meeting or the Board of Directors, operational regulations and procedures and corporate risk management procedures;
b) Supervising the execution of internal regulations and monitoring the Company’s internal activities with latent conflicts of interests, particularly business operations for the Company's interests and its employees' personal transactions; supervising the fulfillment of responsibilities of the securities company's personnel and partners regarding mandated activities;
c) Inspecting details of the code of professional ethics and supervising the implementation of such details;
d) Supervising calculations and conformity to financial security regulations;
dd) Separating clients' property;
e) Maintaining and retaining clients' possessions;
g) Administrating the abidance by the laws on anti-money laundering;
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3. The securities company is required to set up the internal control system which includes organizational structure, internal procedures and regulations governing every position, unit, division and activity of the securities company with the aim of ensuring the following objectives:
a) The securities company operates in compliance with regulations of the Law on Securities and relevant legislative documents;
b) Clients’ rights and interests are guaranteed;
c) The securities company operates in a safe and efficient way; its assets and resources are managed and used safely and effectively;
d) Financial information and management information systems must timely provide truthful, rational and sufficient information; the securities company’s financial statements shall be produced accurately and faithfully.
4. Requirements to be satisfied by members of the internal control committee:
a) Head of the internal control committee must possess expertise in law, accounting and/or auditing. Moreover, the holder of this position must have sufficient experience, prestige and authority to carry out assignments in an efficient manner;
b) A member of the internal control committee must have no intimacy with heads of specialized divisions, securities practitioners, Director (General Director), Deputy Directors (Deputy General Directors), or branch managers of the securities Company;
c) They must possess credentials in fundamental knowledge of securities and securities market, and certificates of completion of courses in laws on securities and securities market or practicing certificates for securities practitioners;
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Article 39. Charter capital increase, swap of stocks or capital contributions 15
1. Increase of charter capital
a) A securities company cannot increase its charter capital before undertaking securities operations in official manner;
b) A securities limited liability company can raise its charter capital in these manners:
- The owner or contributing members contribute additional finances to the charter capital of a single-member limited liability company or multi-member limited liability company, respectively;
- Mobilize investments from new contributing members. If a securities single-member limited liability company augments its charter capital by gaining investments from other entities, such company must convert its legal type according to Article 64 and Article 65 herein;
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- Convert debts to capital contributions according to agreements between the securities company and relevant creditors: Debts eligible for conversion shall be those specified in the latest financial statement, as audited or examined, and ratified by the Owner or the Board of Members.
c) A securities joint-stock company augments its charter capital in these manners:
- Sell shares to existing shareholders and other entities through an offering passed by the General Shareholders Meeting;
- Deliver undistributed profits and other valid funds for the increment of the charter capital: If the charter capital is increased by undistributed profits and other valid funds from the equity, the securities company must maintain sufficient finances for such increase after setting up adequate provisions as per the laws on financial policy for securities companies. The securities company cannot utilize financial reserves and differentials arising from asset revaluation for the increase of the charter capital. If the securities company uses share premium composed of differentials between the selling price and purchase price of treasury stocks, such method shall only be permissible upon the company's selling all treasury stocks. If the securities company uses share premium composed of differentials between the face value and the selling price in an offering, such method shall only be permissible one year after the end of the offering;
- Convert debts to capital contributions according to agreements between the securities company and relevant creditors: Debts eligible for conversion shall be those specified in the latest financial statement, as audited or examined, and ratified by the General Shareholders Meeting;
- The securities company shall have convertible bonds converted to stocks upon the fulfillment of requirements for conversion as per the laws.
d) Prior to the increase of the charter capital as per Point b Section 1 of this Article, the securities company must apply for registration with SSC. Such application includes:
- The application form for charter capital increase which includes details of the method and value of capital increase;
- The decision by the company’s Board of Members or the Owner on the capital increase and the capital mobilization plan approved by the Board of Members or the Owner;
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- The latest financial statement audited or examined in case undistributed profits and valid funds are spent on the increase of the charter capital or in case such increment derives from the restructuring of debts converted to capital contributions according to agreements between the company and creditors. If a single-member limited liability company converts debts to capital contributions, such conversion must abide by Article 64 and Article 65 herein;
dd) Prior to the increase of the charter capital as per Point c Section 1 of this Article, the securities company must apply for registration with SSC. The application and procedures shall be as follows:
- Sale of shares to existing shareholders and other entities: If stocks are offered to one hundred (100) or more defined shareholders, the securities company must abide by regulations on public offering. If stocks are offered to less than one hundred (100) defined shareholders, the securities company must abide by regulations on private placement;
- Delivery of undistributed profits and other valid funds for the increment of the charter capital: Requirements, documents and formalities shall be governed by regulations on public offering of additional stocks;
- If the charter capital is increased by restructuring of debts that are converted to capital contributions as per agreements between the securities company and creditors: The securities company shall conform to regulations on private placement for debt swap in public companies;
- Conversion of bonds to shares: Within three (03) working days upon the complete conversion of bonds to shares, the securities company must report to SSC about the result of such conversion.
2. Swap of share capital or capital contributions or private placement for equitization:
a) A securities company issues stocks to swap shares or capital contributions for its consolidation or merger with another securities company or its acquisition of a fund management company:
- If a securities company issues stocks to swap shares or capital contributions with one hundred (100) or more defined shareholders: Requirements, documents, and formalities shall be governed by regulations on public offering for stock swap subject to contracts for consolidation or merger;
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b) Private placement for equitization: A securities company must obtain the Decision by its Owner or Board of Members on approval for its equitization and private placement for such purpose, and plans for swap and offering ratified by the Owner or the Board of Members. Formalities of private placement for equitization by a securities company shall be governed by regulations on private placement by public companies.
3. SSC shall give a written response to the securities company within fifteen (15) days from the receipt of valid application for approval for charter capital increase, swap of share capital or capital contributions, or private placement for equitization as per Point d and dd Section 1 and Section 2 of this Article.
4. Within seven (07) working days upon the complete increase of the charter capital, the securities company shall go through formalities for amendments to the license for establishment and operation according to Article 12 herein.
Article 40. Prudential ratio 16
1. Securities companies must achieve prudential ratio as defined by the Ministry of Finance’s regulations on prudential ratio and measures against securities institutions that fail to achieve the prudential ratio.
2. The minimum equity of a securities company must be equal to the legal capital as defined by the Government for each line of business. If the equity is lower than the legal capital (according to the latest month's operating statement), the Board of Directors or the Board of Members of the securities company, within thirty (30) days upon the inferiority of the equity to the legal capital, shall be responsible for:
a) Developing and implementing response plans (capital increase and/or removal of securities operations) to maintain the equality of the minimum equity and the legal capital;
b) Reporting to SSC in writing about response plans as stated in Point a of this Section and the undertaking to implement such plans. Such report must at least indicate:
- The value of the equity at the reporting time;
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- Measures that keep the equity on par with the legal capital and achieve the prudential ratio as required by laws.
3. Within six (06) months upon the inferiority of the equity to the legal capital as shown in the monthly operating statement, the securities company’s equity must at least be equal to the legal capital. If the equity is still lower the legal capital after six (06) months, the securities company shall suffer prohibitions on:
a) Profit distribution, establishment of branches, transaction offices or representative offices, outward investments, addition of securities operations and registration of margin trading;
b) If the securities company continues or fails to rectify situations that lead to ordinary or special control or gross loss below fifty percent (50%) of its charter capital, SSC shall, within fifteen (15) days from the expiry date of the six (06) months’ time for capital increase or removal of securities operations as per this Section, decide to suspend one or some operations of such company on the basis of the equality of the minimum equity and the legal capital in corresponding to remaining securities operations. Formalities for suspension of one or some operations of a securities company shall be governed by regulations in Article 14 herein. If the securities company’s equity does not match its legal capital after the suspension period, SSC shall, within five (05) working days, decide to remove its securities operations suspended.
4. Annual financial statements and liquidity ratio statement as of June 30 and those as of December 31 must be, respectively, examined or audited by an approved audit organization.
5. SSC shall be responsible for publishing information about securities companies under ordinary or special control and relevant information on its website within twenty four (24) hours upon its decision to exercise ordinary or special control.
Article 41. Treasury stocks 17
1. A securities joint-stock company can buy back at most ten percent (10%) of ordinary shares issued for its own treasury, except for odd lot purchases requested by clients or purchases for error correction as per regulations by Vietnam Securities Depository or repurchase of stocks at shareholders’ requests as per Article 129 of the Law on Enterprises.
2. A securities company can purchase treasury stocks with finances from undistributed net profits, share premium and other funds from the equity, which are permissible contributions to the charter capital (excluding financial reserve funds) according to the laws. The securities company, after purchasing treasury stocks, must maintain the equality of the minimum equity and the legal capital as per the laws.
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3. Requirements, documents and formalities for securities companies’ repurchase and sale of treasury stocks shall be governed by regulations on public companies.
4. If a securities company completes its repurchase of treasury stocks or cancellation of treasury stocks for charter capital decrease, it must make adjustments to reduce the charter capital in accordance with regulations in Article 12 herein.
1. The debt/equity ratio of a securities company is not allowed to exceed 03. Total liabilities prescribed herein exclude:
a) Clients’ pecuniary deposits for securities transactions;
b) Welfare funds;
c) Provisions for redundancy pay;
d) Damage compensation fund.
2. Current liabilities of a securities company are not greater than its current assets.
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a) The securities company shall prepare and submit the application for private placement of convertible bonds to SSC by hand or by post. The application includes:
- The application form for private placement of convertible bonds, which indicates the offering value and target buyers;
- The Decision made by the General Shareholders Meeting giving approval for the plans for offering of convertible bonds, use of net proceeds from the offering and bond conversion. The bond conversion plan must indicate requirements, time limit and ratio of conversion and price formula;
- The written undertaking by the securities company to conduct its duties to investors regarding conditions for issuance and payment, assurance of investors' legitimate rights and interests and other conditions;
- The scheme for issuance of stocks upon convertible bond’s maturity and the plan for recompense for owners of convertible bonds.
b) Within fifteen (15) days from the receipt of the sufficient and valid application, SSC shall publish on its website and relate to the securities company the information on the former's admission of sufficient application for registration of the company’s private placement of convertible bonds;
c) The securities company must implement and complete the offering according to the registered plan within ninety (90) days from the receipt of SSC’s notice of its admission of sufficient application for registration of private placement of convertible bonds;
d) The securities company must open an escrow account, which receives net proceeds from the offering, at a commercial bank that has no connection with such company or with the offering according to the regulations in Section 3 Article 21 of the Law on Securities;
dd) Within five (05) working days upon the completion of the offering, the securities company must send the offering report to SSC, enclosed with the written confirmation granted by the bank where its escrow account is opened of finances raised from the offering.
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g) From the receipt of SSC’s assent to the result of the offering, the issuer can request the release of net proceeds from the offering.
1. Securities companies cannot lend money or securities in any manner, except for the cases stated in Section 4 and Section 5 of this Article.
2. A securities company cannot use its or its clients’ money or assets to guarantee a third party’s payments.
3. A securities company cannot give loan in any manner to its Owner, major shareholders, members of the Board of Control, the Board of Directors, the Board of Members or the Board of Management, chief accountant, other managerial individuals appointed by the Board of Directors and people related to such persons.
4. A securities company which is permitted to carry out margin transactions as per the laws can lend clients money for purchase of securities on margin according to the Ministry of Finance’s guidelines.
5. A securities company can lend securities for correction of transaction errors or for trading of exchange-traded funds certificates or other forms as per relevant laws.
Article 44. Investment restrictions
1. Securities companies are not allowed to purchase or invest in the purchase of real estates, except cases where the real estate is purchased to establish the head office, branch, or transaction office serving securities operations of a securities company.
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3. 20 The sum of investments in a securities company's corporate bonds must not exceed seventy percent (70%) of its equity. A securities company licensed for proprietary trading of securities can resell and repurchase listed bonds according to regulations on resale and repurchase of bonds.
4. A securities company cannot directly or commission other entities to:
a) Make investments in stocks or capital contributions to a company that owns more than fifty percent (50%) of the charter capital of the securities company, excluding odd lot purchases as requested by its clients;
b) Make investments together with its related persons in five percent (5%) or more of the charter capital of another securities company;
c) Make investments in more than twenty percent (20%) of a listed organization’s stocks and fund certificates in circulation;
d) 21 Make investments in more than fifteen percent (15%) of an unlisted organization’s stocks and fund certificates in circulation. This clause does not apply to certificates from private funds, exchange-traded funds and open funds;
dd) Make investments or capital contributions whose value exceeds ten percent (10%) of total paid-in capital of a limited liability company or business project;
e) 22 Make investments or capital contributions whose value exceeds fifteen percent (15%) of the equity to an organization or business project.
g) 23 Make investments whose value exceeds seventy percent (70%) of the equity in stocks, capital portion and business projects. Moreover, only investments valued less than twenty percent (20%) of the equity can be poured into unlisted stocks, capital portion and business projects.
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a) The equity, upon the capital contribution or purchase of asset management company, must be at least equal to the legal capital defined for its existing securities operations;
b) The liquidity ratio, upon the capital contribution or purchase of asset management company, must reach at least one hundred eighty percent ((180%);
c) The securities company, upon the capital contribution or purchase of asset management company, must abide by regulations on debt limits in Article 42 herein and investment restrictions in Clause 3 and Point e Clause 4 of this Article.
6. If a securities company makes investments in excess of permitted limits because of firm commitment underwriting, consolidation, merger or significant changes in assets and/or equity of the securities company or a contributing member, it must implement necessary measures to achieve portfolio limits prescribed in Clauses 2, 3 and 4 of this Article within a period of one (01) year.
OPERATIONS OF A SECURITIES COMPANY
Article 45. Principles of operation
1. Securities companies must formulate and promulgate operational procedures, internal control procedures and risk management procedures in corresponding to licensed operations.
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3. Each securities company must ensure the separation of working offices, personnel, data and reporting systems between its operational divisions so as to prevent conflict of interest between the securities company and its clients or between clients themselves. Clients of a securities company should be informed of latent conflicts of interest that may arise between the securities company or its securities practitioners and clients.
4. 24 Securities companies must assign securities practitioners who possess professional certificates conformable to professional activities. Securities practitioners, who provide brokerage and investment consultancy services, cannot concurrently perform tasks for proprietary trading, underwriting or management of accounts for entrusted transactions.
5. Securities companies are not allowed to make the judgment or commitments to clients on earnings or profits attainable from their investments or to guarantee clients’ safety against losses, except for investments in securities that generate fixed incomes.
6. Securities companies are permitted to disclose clients’ information without their permission or without requests from competent governmental authorities.
7. Securities companies are not permitted to perform actions that lead to clients’ and investors’ misapprehending securities prices.
8. Securities companies must provide elucidation of analysis grounds and information sources for price forecast or recommendations on transactions related to a particular security, given on mass media.
9. 25 Securities companies, when conducting securities operations, must directly conclude contracts with clients via its legal representative or an individual authorized by the legal representative. Securities companies must assume all liabilities and execute contracts as per their provisions and in conformity to the laws on securities, contracting and securities business activities that are stipulated in such contracts.
10. 26 Clients’ possessions under securities companies' management shall comprise pecuniary deposits for securities transactions as per Article 50 of this Circular and securities deposited and retained at securities companies as per Article 51 of this Circular, including those held in specialized accounts under the company's name. When securities companies undergo dissolution or bankruptcy, clients’ possessions must be returned after clients’ payables to the securities company have been settled.
11. 27 Securities companies and their personnel are not allowed to:
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b) Make investments on clients' behalf, except for mandated management of individual investors’ securities trading accounts as per Article 61 of this Circular.
Article 46. Suspension of a securities company
1. Suspending operations at the head office, branch or transaction office of a securities company requires an approval from SSC. Suspension period shall not exceed ninety (90) days. Over the abovementioned period, if a securities company fails to resume its operation, SSC shall revoke its license for establishment and operation or establishment decision.
2. The application for approval for suspension of operations shall be made in one (01) set of originals and presented to SSC by hand or by post. Such application shall include:
a) The application form for approval for suspension of operations (using the form stated in the Appendix XIV enclosed herewith);
b) The decision issued by the Board of Directors, the Board of Members or the Owner of the securities company on suspension of operations;
c) The plan for settlement of clients’ contracts in effect.
3. Within fifteen (15) working days from the receipt of the valid application including all documents as prescribed in Section 2 of this Article, SSC shall make a decision on approval for suspension of operations of the head office, branch or transaction office of the securities company. SSC, if rejecting the application, must respond in writing and specify its justifications.
4. The securities company is responsible for reporting to SSC within twenty four (24) hours from the resumption of operations of its head office, branch or transaction office.
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Article 47. Responsibility for securities brokerage
1. A securities company must assign securities practitioners to perform the following duties:
a) Provide consultancy, explain contract terms and provisions, and carry out procedures for opening of trading accounts for clients;
b) Provide consultancy for clients about securities transactions;
c) Receive and monitor trading orders from clients;
d) Hold leading positions at divisions relating to securities brokerage.
2. Securities companies must strictly comply with regulations on anti-money laundering of applicable laws.
3. Data about clients’ brokerage accounts opened at the securities company must be managed by a central management system. Backup files thereof must be also stored.
4. A securities company that provides brokerage services is not permitted to:
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b) Negotiate or fix interest rate or share profit/ loss with clients to attract them into transactions;
c) Directly or indirectly establish locations rather than those approved by the SSC for signing of contracts, receipt and processing of securities trading orders or settling payments for securities with clients;
d) Take orders and process payments with individuals who do not own the related accounts without clients’ written proxy;
dd) Disclose details of clients' orders or other information collected during the processing of clients’ trading orders for the purposes other than the compulsory information announcement or inspections as regulated by laws;
e) Use clients’ names or accounts to register or trade securities;
g) Make violation of clients’ possessions, legitimate rights and benefits.
Article 48. Opening trading accounts
1. Securities company must carry out procedures for opening trading account for each client according to the written request and contract for opening of trading account signed with the client. The written request for opening of trading account must include basic contents prescribed in the Appendix XV enclosed herewith. The contract for opening of trading account must include basic contents prescribed in the Appendix XVI enclosed herewith.
2. Securities company is obliged to explain terms and provisions of contracts for opening of trading accounts and procedures relating securities transactions to its clients, and find out financial capacity, risk tolerance and expected profits of clients.
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a) Agreement that arranges the securities company’s evasion of legal liabilities without giving legitimate reasons;
b) Agreement that limits the securities company’s compensations without giving legitimate reasons or shifts risks from the securities company to clients;
c) Agreement that forces clients to incur unfair liabilities for compensation;
d) Agreements that stipulate clients’ unjust disadvantages.
4. Investors opening accounts at securities company must complete the information on contracts for opening of trading accounts.
Article 49. Responsibility towards clients
1. When giving counsels to clients, the securities company must gather adequate information about clients and not ensure value of securities invested by clients according to the securities company’s recommendations.
2. Securities company is obliged to update clients’ information at their requests.
3. Securities company must directly conclude contracts for opening of trading accounts for clients, directly perform securities transactions for clients and be responsible before the law for these activities.
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5. Securities company is obliged to specifically monitor money and securities of clients, and provide information on the balance, arisen amounts (if any) and securities for clients according to their requests.
6. Securities company must establish a unit specialized in communicating with clients and handling their inquiries and complaints.
Article 50. Managing money for clients
1. Securities company must manage deposits for securities trading separately for each client and separately from clients' money and that of the securities company.
2. Securities company is not allowed to directly receive and pay cash for client’s securities trading. Any payments must be made through commercial banks.
3. Securities company is not allowed to misuse clients’ money in any forms. Transactions related to clients’ money shall be made in accordance with applicable law regulations.
4. Securities company must set up a system for managing clients’ money separately as mentioned in Point a of this Clause. Moreover, the securities company may set up additional systems according to the method mentioned in Point b of this Clause.
a) A client shall directly open an account at a commercial bank designated by the securities company to manage money for trading securities. According to this method, such client, securities company and commercial bank shall come into an agreement on methods for confirmation, blockage of account balance and money transfer for settling client’s transactions. After a client's buy order is matched, the securities company is entitled to request the bank where the investor’s account is opened to transfer money in proportion to the matching value into the securities settlement account opened by the securities company at a commercial bank. The securities company is obliged to make settlement for securities transaction, on behalf of the client, to relevant parties;
b) The securities company shall open a specialized account at a commercial bank to manage clients’ money deposited for trading securities. Such specialized account must be opened separately from other accounts of the securities company.
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- Client’s payment or transfer of money to securities trading account;
- Client’s withdrawal or transfer of money from securities trading account;
- Client’s settlement for securities transactions;
- Client’s payment of deposit for a transaction or money for buying securities at auction;
- Client’s payment for a call option;
- Other payments made at the client’s request and as required by laws.
The securities company is obliged to set up an accounting system for managing deposits for each investor. The securities company is obliged to clearly determine the account balance (if any) at any time for each client and provide the account statement for each client at any time at the request of a client or the competent authority.
The securities company shall comply with any requests for withdrawal or transfer of money made by a client provided that such requested amount does not exceed the client’s account balance and such client has fulfilled all liabilities towards the securities company.
The securities company is not allowed to make internal transfer of money among accounts of clients.
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6. Within three (03) working days from the date on which the securities company and a commercial bank enter into the contract as specified at Points a and b Clause 4 of this Article, the securities company is required to send a report thereof to the SSC, enclosed with the valid copy of such together with a valid copy of such contract.
7. By sixteen (16) o’clock of Monday weekly or the first working day of the week, the securities company opening specialized accounts must send a report to SSC on the number of clients and client’s balance on specialized accounts of the securities company opened at commercial banks (using the form stated in the Appendix XVII enclosed herewith). Reporting figures must be closed at the end of the working day before the reporting day.
Article 51. Managing securities for clients
1. Management of securities centrally registered or deposited:
a) The securities company must manage clients' securities separately from those of the securities company;
b) The securities company must re-deposit client’s securities at the Vietnam Securities Depository within one (01) working day from the receipt of the client’s valid request for securities deposit;
c) The securities company shall promptly and fully notify clients of the rights and benefits arisen from their securities;
d) Securities may be deposited, withdrawn or transferred only at the client’s request and in accordance with regulations on registration, depository, clearing and settlement for securities.
2. With regard to securities which are not yet centrally registered or deposited, the securities company is entitled to register and deposit clients’ securities at the securities company under contracts signed with such clients and in conformity with regulations in Article 58 and Article 59 herein.
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1. Securities company may receive trading orders from its clients in the following forms:
a) Receiving trading orders directly at trading counters; or
b) Receiving distance orders via telephone, fax, internet or other transmission lines.
2. Securities company may receive online trading orders if this form has been registered with the SSC in accordance with applicable regulations.
3. The securities company, when receiving trading orders online, via telephone, fax or other transmission lines, must:
a) strictly comply with the Law on Electronic Transactions and its instructional documents;
b) ensure that information concerning trading orders is sufficiently recorded at the time of receiving trading orders, and keep evidence of clients’ order placing;
c) ensure that trading orders must be confirmed with clients before they are entered into the trading system;
d) implement measures for ensuring safety and security of transmission lines and suitable remedial measures against failure to enter clients’ trading orders into the trading system because of the company’s mistakes.
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5. Securities company must promptly and accurately process clients’ trading orders.
6. Securities company may receive a client's order to buy or sell securities only when having one hundred percent (100%) of cash or securities and taking necessary measures to ensure the client’s capacity for making settlement for transaction.
7. Securities company must inform order processing results to the client as soon as the order is matched upon the method as agreed upon between the securities company and the client.
8. In case a client opens a depository account at a depository member who is not a trading member, the trading member and the depository member must conclude an agreement on division of two parties’ liabilities according to the principle that the trading member shall be liable for processing trading orders and the depository member shall be liable for checking rate of margins in cash or securities of such client and making payments for the client in accordance with the law.
Section 3. PROPRIETARY TRADING
Article 53. Proprietary trading of securities
1. Securities company must have enough cash and securities so as to make settlements for trading orders made on its account.
2. Securities company must use its own name to perform proprietary trading operations. It is not allowed to perform proprietary trading operations in the name of another person or in an individual name or let other persons use its proprietary trading account.
3. The following operations are not considered as proprietary trading of securities:
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b) Buying or selling treasury stocks.
4. Securities company must prioritize clients’ orders over its ones.
5. Securities company must notify its client of the case where it is a partner of a transaction agreed upon with such client.
6. If a client’s buy or sell order can significantly influence the price of a certain securities type, securities company is not allowed to itself buy or sell such securities type or provide information for a thirty party to buy or sell such type of securities.
7. When a client makes a limit order, securities company is not allowed to buyer or sell on the same side of that securities type at a price equal to or better than the client’s price before such client's limit order is processed.
Section 4. SECURITIES UNDERWRITING
Article 54. Underwriting requirements
A securities company may provide firm commitment underwriting when it satisfies the following requirements:
1. It is licensed to perform underwriting operations.
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a) not be greater than one hundred percent (100%) of the equity defined in the financial statement of the last quarter;
b) not exceed fifteen (15) times the difference between current assets and current liabilities as defined in the financial statement of the last quarter.
3. The securities company has not been under an ordinary or special control within three (03) months prior to the time of signing the underwriting agreement.
Article 55. Limitations on underwriting
1. A securities company is not allowed to grant a firm commitment underwriting or act as the main underwriter in the following cases:
a) The securities company, independently or together with its subsidiaries or related persons, owns 10% or more of the charter capital of the issuer, or is entitled to govern the issuer, or entitled to appoint the Director (General Director) of the issuer;
b) An individual or an organization concurrently owns 30% of the charter capital of the securities company and the same of the issuer;
c) The issuer, independently or together with its subsidiaries or related persons, owns 20% or more of the charter capital of the securities company, or is entitled to govern the securities company, or entitled to appoint the Director (General Director) of the securities company;
d) A member of the Board of Directors, Director (General Director) or a person related to a securities company is also the member of the Board of Directors or Director (General Director) of the issuer;
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e) The securities company and the issuer share the same legal representative.
2. The securities company that provides underwriting must open a specific account at a commercial bank for receiving deposits for buying securities paid by investors.
Section 5. SECURITIES INVESTMENT CONSULTANCY
Article 56. Responsibility of securities companies
1. In order to provide investment consulting services, the securities company is required to conclude a service contract with the client. Such service contract must contain the followings:
a) Rights, obligations and responsibilities of the contracting parties;
b) Scope of investment consultancy;
c) Method of providing consulting services;
d) Service fee.
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a) Client’s financial situation;
b) Client’s investment goals;
c) Client’s risk tolerance;
d) Client’s investment experience and knowledge.
3. Securities company must provide well-grounded and reasonable investment advice for clients based on reliable information and logical analysis. Investment recommendations must be given in connection and conformity with securities analysis and securities market analysis. The report on securities analysis, securities market analysis, and investment recommendations must specify data sources cited and name of the person in charge of such report.
4. Securities company providing investment consulting service must provide sufficient information for the client to make investment decision, including contents and risks of its product or service.
5. Securities company is liable to keep secret of information provided by its client during the process of providing consulting service, except information is disclosed with client's consent or as required by law.
6. Securities company must provide counsels on investments in corresponding to clients’ investment goals and financial situations and shall assume responsibility for analytical results and reliability of information provided for such clients.
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1. Making decisions on securities investments on behalf of a client.
2. Negotiating with a client to share profit or loss.
3. Advertising or stating that its contents, efficiency or methods of securities analysis are better than those of the others.
4. Providing false information for clients to attract or entice them to buy a certain securities type.
5. Providing false, fraud or misleading information for clients.
6. Making other acts in violation of law provisions.
Section 6. SECUDITIES DEPOSITORY
Article 58. Scope of depository operations
A securities company that possesses a Certificate of depository registration is entitled to:
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2. Make settlement for securities transactions made on Stock Exchanges for clients.
3. Manage shareholder books and act as a transfer agent as requested by an issuer which is not a public company.
Article 59. Rights and obligations of securities company providing depository service
1. Open depository accounts for clients at the securities company, and manage such clients’ depository accounts in accordance with the law regulations. Clients’ depository accounts must be managed separately from those of the securities company.
2. Record and update information about clients who open depository accounts and their securities deposited at the securities company.
3. Collect, keep and process data relating to depository and clearing activities of clients.
4. Formulate procedures for securities registration and depository, clearing, shareholder book management and transfer agent, and internal control procedures with the aims of managing and protecting legitimate interests of clients or securities owners.
5. Collect securities registration and depository service fees and other fees as prescribed by laws.
Section 7. FINANCIAL CONSULTANCY
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1. Securities company is allowed to provide financial consultancy. To be specific:
a) Giving advice about restructuring, merger, consolidation, re-organization and sale of enterprises;
b) Giving advice about business management and strategies;
c) Giving advice about securities offering and listing;
d) Giving advice about equitization and business valuation;
dd) Providing other financial consulting services in accordance with law.
2. A securities company is not allowed to provide the service mentioned in Point c, Point d Clause 1 of this Article to another company in which it holds ten percent (10%) or more of charter capital.
3. Securities companies providing financial consultancy must comply with regulations of the Law on Securities and relevant laws.
Section 8. OTHER FINANCIAL SERVICES
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1. General principles:
a) The securities company that is licensed to carry out both securities brokerage and investment consultancy is entitled to accept trusteeship for managing trading accounts by means of trust contracts for managing trading accounts signed with individual investors;
b) A securities company is not allowed to accept trusteeship for deciding all securities transactions performed via trading accounts on behalf of individual investors. Individual investors must specify entrusted contents in conformity with Clause 2 of this Article;
c) Trust securities are stocks and fund certificates listed on Stock Exchanges, excluding securities registered for trading on UpCom (the unlisted public company market);
d) Securities company shall appoint securities practitioners who hold certificates in financial analysis or fund management to manage entrusted trading accounts.
2. Trust scope includes the following contents:
a) Types of securities to be traded;
b) Maximum volume of securities bought and sold of each type;
c) Maximum value for each trading order;
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dd) Trading method and type of trading order.
3. Securities company shall collect information about financial capacity, investment period, investment goals, risk tolerance, investment restrictions, list of investment securities (if any) and other requirements laid down by an individual investor before entering into trust contract. Securities company is entitled to reject trusteeship in case the investor provides insufficient or inaccurate information.
4. Trust contract:
a) Validity of a trust contract shall not exceed one (01) year from the date on which it is signed.
b) A trust contract includes:
- Investor’s particulars;
- Particulars of securities practitioner who is assigned to manage the investor’s trading account (if any);
- Entrusted contents;
- Rights and duties of contracting parties;
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- Methods of payment and contract liquidation;
- Methods of dispute resolution.
5. In case a securities company commits breach of the trust contract signed with the investor, which causes loss or damage to the investor, it is liable to make compensation to the investor according to written agreement made by the two parties. Profits generate during the validity of the trust contract shall belong to the trustor.
6. Rights and duties of the securities company being a trustee:
a) Honestly act in best interests of the investor; the securities company is not allowed to use information provided by the investor to seek for its private interests and cause damage to the investor;
b) Request the investor to provide necessary information;
c) To buy/ sell securities within the trust scope;
d) Clearly explain and provide sufficient information about all risks incurring during the management of the investor's trading account in trust;
dd) Provide the investor with the statement of securities transactions on a monthly basis or at the request of the investor;
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g) Send monthly report (using the form stated in the Appendix XXII enclosed herewith) or ad hoc report to SSC on management of trading accounts in trust;
h) Provide the list of qualified securities practitioners for investors so that they can choose the ones to manage their trading accounts;
i) Establish an independent supervisory division to take charge of supervising securities practitioners’ management and conduct of securities transactions via entrusted trading accounts in order to ensure that these transactions shall be made in conformity with terms and conditions of trust contracts and investment goals of investors;
k) Any trading orders processed under a trust contract must be timely and properly recorded;
l) Securities company is required to inform and obtain a written consent from the investor before making investment in securities issued with its underwriting during the underwriting period.
Article 62. Other financial services
1. Securities company may provide other financial services only when Ministry of Finance’s guidance thereof is available.
2. Financial services provided according to Clause 1 of this Article must be related to and facilitate licensed operations of the securities company, and must not adversely influence benefits of clients, of the securities company itself and the market.
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Section 1. CONVERSION OF SECURITIES COMPANIES
Article 63. Conversion forms of securities companies
1. A securities company may be converted from a single-member limited liability company to a multi-member limited liability company and vice versa.
2. A securities company may be also converted from a limited liability company to a joint stock company and vice versa.
Article 64. Requirements for conversion of a securities company
1. The conversion of a securities company and the plan of conversion must be approved by the General Shareholders Meeting, the Board of Members or the Owner of such securities company.
2. The converted securities company must satisfy the requirements mentioned in Clauses 1, 2, 3 and 4 Article 3 herein.
3. If a securities company is converted to a single-member limited liability company, it must abide by the requirements in Point b Clause 5 Article 3 herein.
4. The conversion of a securities company shall not affect interests of its clients (if any).
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Article 65. Conversion procedures
1. The securities company must obtain an approval from SSC for its conversion. The application for approval for company conversion shall be made in one (01) set of originals and presented to SSC by hand or by post. The application includes:
a) The application form for approval for company conversion (using the form stated in the Appendix XVIII enclosed herewith);
b) The meeting minutes or the decision issued by the General Shareholders Meeting, the Board of Members or the Owner on approval for company conversion;
c) The plan of conversion approved by the General Shareholders Meeting, the Board of Members or the Owner of the converting securities company;
d) The application for approval for transfer of ten percent (10%) or more of the paid-in charter capital (if any) as prescribed in Clause 2 Article 30 herein;
dd) The documents proving the securities company’s fulfillment of the requirements in Clause 3 Article 64 herein.
2. Within thirty (30) working days from the receipt of the valid application including all documents as prescribed in Section 1 of this Article, SSC shall make a decision on approval for company conversion. SSC, if rejecting the application, must respond in writing and specify its justifications.
3. The securities company shall carry out the conversion in accordance with regulations of the Law on Enterprises. The securities company that combines the company conversion and private placement or public offering of shares must also comply with relevant regulations on offerings.
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a) The application form for the license for establishment and operation (using the form stated in the Appendix I enclosed herewith);
b) The report on implementation of the conversion plan, including the list of shareholders or capital contributing members of the converted company (using the form stated in the Appendix V enclosed herewith), results of the transfer of ten percent (10%) or more of the charter capital (if any) (using the form stated in the Appendix XIII enclosed herewith), and offering results (if any);
b) The written statement about facilities at the company’s head office available for conduct of securities operations (using the form stated in the Appendix II enclosed herewith);
d) The list of Director (General Director) and securities practitioners who shall work at the company’s head office (using the form stated in the Appendix III enclosed herewith), enclosed with valid copies of their securities practicing certificates, personal profiles of Director (General Director) (using the form stated in the Appendix IV enclosed herewith);
dd) The written confirmation of capital increase (if any) made by the bank where the securities company’s escrow account is opened or an audit organization approved by SSC;
e) The draft Charter of the converted securities company;
g) The original copy of the License for establishment and operation of the converting securities company.
5. SSC shall conduct a physical inspection of facilities of the converted securities company if there is a change of its head office or such inspection is deemed necessary to clarify any issues relating facilities of the converted securities company.
6. Within thirty (30) days from the receipt of the valid application including all documents prescribed in Clause 4 of this Article and inspection results of facilities (if any), SSC shall re-issue a license for establishment and operation. SSC, if rejecting the application, must respond in writing and specify its justifications.
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8. The converted securities company is required to make information announcement in accordance with applicable law regulations.
9. Branches and/or transaction offices of a securities company that continue their operations after conversion must apply for amendments to decisions on approval for establishment of branch or transaction office as prescribed in Articles 20, 30 herein. Branches and/or transaction offices that shut down must carry out procedures for closure of branch or transaction office in accordance with regulations in Articles 19, 22 herein.
Section 2. CONSOLIDATION AND MERGER OF SECURITIES COMPANIES
Article 66. Requirements for consideration and merger
1. Consolidated securities companies and acquired securities companies must satisfy the requirements mentioned in Clauses 1, 2, 3 and 4 Article 3 herein.
2. The consolidation or merger and the plan of consolidation or merger of a securities company must be approved by its General Shareholders Meeting, Board of Members or Owner.
3. The consolidation or merger of a securities company shall not affect interests of its clients (if any).
4. Securities companies involved in a consolidation or merger must strictly comply with regulations of the Law on Competition and relevant laws.
Article 67. Consideration and merger procedures
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a) The application form for approval for consolidation or merger (using the form stated in the Appendix XIX enclosed herewith);
b) The meeting minutes or the decisions on approval for consolidation or merger, issued by the General Shareholders Meetings, the Boards of Members or the Owners of consolidating or acquired securities companies;
c) The principle contract for consolidation or merger (which must include basic contents specified in the Appendix XX enclosed herewith);
d) The plan of consolidation or merger approved by the General Shareholders Meetings, the Boards of Members or the Owners of consolidating or acquired securities companies, which must include the plan for settlement of clients' brokerage accounts (if any) (including basic contents prescribed in the Appendix XXI enclosed herewith);
dd) The application for approval for transfer of ten percent (10%) or more of the paid-in charter capital (if any) as prescribed in Clause 2 Article 30 herein.
2. Within thirty (30) working days from the receipt of the valid application including all documents as prescribed in Section 1 of this Article, SSC shall make a decision on approval for consolidation or merger of securities companies. SSC, if rejecting the application, must respond in writing and specify its justifications.
3. Upon the approval by SSC, relevant securities companies shall make consolidation or merger in accordance with regulations of the Law on Enterprises.
4. Upon the completion of business consolidation or merger, the consolidated or acquiring securities company is required to go through procedures for re-issuance of the license for establishment and operation. The application for re-issuance of the license for establishment and operation shall be signed by legal representatives of securities companies involved in the consolidation or merger, made in one (01) set of originals and presented to SSC by hand or by post. The application includes:
a) The application form for issuance of the license for establishment and operation (using the form stated in the Appendix I enclosed herewith);
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c) The list of shareholders or capital contributing members of the consolidated or acquiring securities company; the written results of transfer of ten percent (10%) or more of the charter capital (if any);
d) The written statement about facilities at the consolidated or acquiring securities company’s head office available for conduct of securities operations (using the form stated in the Appendix II enclosed herewith);
dd) The list of Director (General Director) and securities practitioners who shall work at the head office of the consolidated or acquiring securities company (using the form stated in the Appendix III enclosed herewith), enclosed with valid copies of their securities practicing certificates, personal profiles of Director (General Director) (using the form stated in the Appendix IV enclosed herewith);
e) The draft Charter of the consolidated or acquiring securities company;
g) The original copies of licenses for establishment and operation of consolidating or acquired securities companies.
5. SSC shall conduct a physical inspection of facilities of the consolidated or acquiring securities company if there is a change of its head office or such inspection is deemed necessary to clarify any issues relating facilities of the consolidated or acquiring securities company.
6. Within thirty (30) days from the receipt of the valid application including all documents prescribed in Clause 4 of this Article and inspection results of facilities (if any), SSC shall re-issue a license for establishment and operation. SSC, if rejecting the application, must respond in writing and specify its justifications.
7. The consolidated or acquiring securities company shall inherit all rights and obligations of consolidating or acquired securities companies.
8. The consolidated or acquiring securities company is required to make information announcement in accordance with applicable law regulations.
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REPORTING, RETENTION AND ANNOUNCEMENT OF INFORMATION
1. Securities companies’ reports must be sufficient, timely and reflective of their actual circumstances.
2. Securities companies must send periodic reports in electronic format to SSC by the time and rules below:
a) Securities companies must send a month’s operating statement by the fifth (5th) day of the following month (using the form stated in the Appendix XXII enclosed herewith);
b) Securities companies must submit quarter's financial statements within twenty (20) days from the last day of that quarter. If a securities company has to make consolidated quarterly financial statement, it must submit such quarter's consolidated financial statement within thirty (30) days from the final day of that quarter;
c) Securities companies must submit the half-year financial statement and the prudential ratio statement made at June 30 and examined by an approved audit organization within forty five (45) days from the end of the first six months of the fiscal year. If a securities company has to make consolidated half-year financial statement, it must submit such consolidated half-year financial statement within sixty (60) days from the end of the first six months of the fiscal year;
d) Annual reports:
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- Securities companies must submit the year’s financial statements and prudential ratio statement made at December 31 and audited by an approved audit organization to SSC by March 31 of the subsequent year. If a securities company has to make consolidated yearly financial statements, it must submit such year’s consolidated financial statements within one hundred (100) days from the last day of the fiscal year.
dd) Financial statements, which securities companies send to SSC according to Point b, c, d of this Section, must contain all parts and details as per articles of the Law on Accounting applicable to securities companies;
e) If a financial statement bears the auditor’s qualified opinions that do not indicate qualified sections and justifications, the securities company must provide explanations in writing, with the auditor’s endorsement, to SSC in no later than thirty (30) days from the statement's date of sending as per Point c and d of this Section.
3. Within three (03) working days upon the following occurrences, securities companies must report to SSC in writing:
a) Loans or investments exceed the limits defined in Article 42 and Article 44 herein;
b) Securities companies' head offices, branches or transaction offices commence operations.
4. Reports upon requests:
SSC is entitled to request securities companies to make written reports, if deemed necessary. The request must specify the content and time limit of such reports.
Article 69. Retention of documents
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2. Securities companies must properly retain documents concerning their clients and others reflecting accurate details about their clients’ transactions and securities companies’ operations.
3. Documents prescribed in Clause 2 of this Article must be retained for a period of at least ten (10) years.
Article 70. Announcement of information
Securities companies must announce information as regulated by the laws on securities, securities markets and other relevant laws.
1. This Circular shall come into force as from January 28, 2013 and supersede the Minister of Finance's Decision No. 27/2007/QD-BTC dated April 24, 2007 on promulgation of Regulation on organization and operation of securities companies and the Minister of Finance's Decision No. 126/2008/QD-BTC dated December 26, 2008 on amendments to the “Regulation on organization and operation of securities companies” enclosed with the Decision No. 27/2007/QD-BTC.
2. Securities companies must, within one (01) year from the date of entry into force of this Circular, amend their Charters according to the template of Charter stated in the Appendix XI enclosed herewith; implement risk management, internal audit and internal control systems as prescribed in Article 35, Article 36 and Article 37 herein; and manage their clients' money in accordance with regulations in Article 50 herein.
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4. Public securities companies and listed securities companies must comply with regulations herein and current laws applicable to public companies and listed companies. If regulations herein are inconsistent with laws applicable to public companies and listed companies, public securities companies and listed securities companies shall be governed by regulations herein.
5. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.
CERTIFIED BY
PP. MINISTER
DEPUTY MINISTER
Tran Xuan Ha
1 This document is integrated by the following two documents:
- The Circular No. 210/2012/TT-BTC dated November 30, 2012 by Minister of Finance providing guidance on establishment and operation of securities companies and coming into force as of January 15, 2013;
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This integrating document shall not supersede the two documents mentioned above.
2 The Circular No. 07/2016/TT-BTC dated January 18, 2016 by Minister of Finance on amendments to the Circular No. 210/2012/TT-BTC dated November 30, 2012 providing guidance on establishment and operation of securities companies is promulgated pursuant to:
The Law on Securities dated June 29, 2006;
The Law dated November 24, 2010 on amendments to a number of articles of the Law on Securities;
The Law on Enterprises dated November 26, 2014;
The Government's Decree No. 58/2012/ND-CP dated July 20, 2012 elaborating and guiding the implementation of the Law on Securities and the Law on amendments to the Law on Securities;
The Government’s Decree No. 60/2015/ND-CP dated June 26, 2015 on amendments to the Government’s Decree No. 58/2012/ND-CP dated July 20, 2012 elaborating and guiding the implementation of some articles of the Law on securities and the Law on amendments to some articles of the Law on securities;
The Government’s Decree No. 215/2013/ND-CP dated December 23, 2013 defining the Functions, Tasks, Powers and Organizational Structure of Ministry of Finance;
The request of Chairman of the State Securities Commission of Vietnam;
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4 This Clause is amended in accordance with Clause 1 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
5 This Clause is supplemented in accordance with Clause 1 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
6 This Clause is supplemented in accordance with Clause 1 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
7 This Article is amended in accordance with Clause 2 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
8 This Article is amended and supplemented in accordance with Clause 3 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
9 This Article is amended and supplemented in accordance with Clause 4 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
10 This Section is supplemented in accordance with Clause 5 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
11 This Clause is amended in accordance with Clause 6 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
12 This Clause is amended in accordance with Clause 7 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
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14 This Article is abrogated in accordance with Clause 18 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
15 This Article is amended and supplemented in accordance with Clause 9 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
16 This Article is amended and supplemented in accordance with Clause 10 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
17 This Article is amended and supplemented in accordance with Clause 11 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
18 This Article is supplemented in accordance with Clause 12 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
19 This Article is amended and supplemented in accordance with Clause 13 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
20 This Clause is amended in accordance with Clause 14 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
21 This Point is amended in accordance with Clause 14 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
22 This Point is amended in accordance with Clause 14 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
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24 This Clause is amended in accordance with Clause 15 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
25 This Clause is supplemented in accordance with Clause 15 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
26 This Clause is supplemented in accordance with Clause 15 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
27 This Clause is supplemented in accordance with Clause 15 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
28 This Article is amended and supplemented in accordance with Clause 16 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
29 Article 2 of the Circular No. 07/2016/TT-BTC dated January 18, 2016 by Minister of Finance on amendments to the Circular No. 210/2012/TT-BTC dated November 30, 2012 providing guidance on establishment and operation of securities companies stipulates that:
“Article 2. Enforcement
1. This Circular comes into force as of March 15, 2016. Previous regulations contrary to this Circular are nullified.
2. Within 01 year as of the date of entry into force of this Circular, securities companies whose equity is lower than the legal capital specified for business operations being licensed must implement measures necessary and legitimate to sustain the equity on par with the legal capital as defined in this Circular. Moreover, securities companies must revise their Charters according to the template of Charter stated in the Appendix XI of this Circular.
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30 This Appendix is supplemented in accordance with Clause 17 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
31 This Appendix is amended in accordance with Clause 17 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
32 This Appendix is amended in accordance with Clause 17 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.
33 This Appendix is amended in accordance with Clause 17 Article 1 of the Circular No. 07/2016/TT-BTC, becoming effective as of March 15, 2016.